Editorial
Farm credit operation invigorated
Institutional thrust making a difference
THERE has been a marked improvement in the volume and quality of credit flow to the agriculture sector. The quality is in the timeliness of, and easy accessibility to, farm credits. To top it off, real farmers are being the beneficiaries with an outreach to the rural doorsteps. These features have had a multiplier effect with the marked increase in the volume of credit.
Concomitantly, and in time with a guaranteed sustenance of the programme, this is likely to have a salubrious impact on the farm sector, the largest employer of our workforce and the biggest contributor to the country's GDP. It also happens to be the sector which holds the key to self-sufficiency in foodstuffs underpinning food security as such.
The loan recovery in agriculture sector improving, the volume of credit flow has marked a rise. Farm credit disbursement during July-November of the current fiscal stood at Tk 4,249 crore compared to Tk 3,378 crore in the same period last year. What is particularly noticeable and heartening is the participation of private sector banks accounting for a 59 percent increase over the previous year's level. The public sector banks' share too increased, by 17 percent.
The Bangladesh Bank's persistent and energetic efforts with the commercial banks, both in the state and private sector have succeeded in securing cooperation of the banking system as a whole in bolstering agriculture credit operations in a significant way. The banks are setting themselves targets and the central bank is playing a catalytic role with the help of a hundred newly appointed assistant directors, among other steps taken.
Importantly, apart from embracing a developmental role in the economy, the banks may have been propelled by the fact that small and medium farmers are apt to pay back their loans in contrast to the big borrowers who have a tendency to default. As if to stimulate them further, the rate of default among farmers has actually marked a decline. All this has been made possible in large part, it seems, by the introduction of a system of loan disbursement based on camping amidst the rural folks that has increased credit flow as well as improving loan recovery.
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